(CPA REVIEW SCHOOL OF THE PHILIPPINES Manila AUDITING PROBLEMS ‘APRIL. 19, 2015 FINAL PREBOARD EXAMINATION SUNDAY, 8:00AM ~ 11:00AM SETA INSTRUCTIONS: CHOOSE THE BEST ANSWER FOR EACH OF THE FOLLOWING. FULLY SHADE ONLY ONE BOX FOR EACH ITEM. STRICTLY NO ERASURES ALLOWED. PROBLEM NO. 1 MACHINE PARTS SUPPLY COMPANY \s a distributor of various engine parts. In testing the sales and purchases cutoff of the company in connection with your audit of is financial statements for the year ended August 31, 20Xt, you find the folowing information: “The company has ceased operation during the physical count on September 2, except for ‘receiving goods from suppliers and making shipments to essential wholesale customers, On the fmoming ofthe physcal count, you noted in your working papers the last shipping document (no, 314)/and receiving report (ro. 682))ssued the previous day. an ‘You observed the client's counting procedures and performed test counts of selected inventory Items. You found the counts end descriptions to be accurate [Before leaving the warehouse at the end of the day after all counting is completed, you performed ‘the folowing: 2 Ie receiving reports book, The last number used was 686. The receiving clerk jyou that al goods received on September 2 were kept in the recewving department INTL Swit other goods received-during the past two or twee days. Siatente 2, Biamined the shipping documents bock. The last number used was 338 3. Asked the receving department to dential goods received September 1. He tld you that Teceving reports 680 through 682 are those goods receved on September i Asked the shipping department to idertify ali goods shipped or sold over the counter September 1. He informed you goods on shiping documents 311 to 313 were shipped September i. 5, Bvamined the Glen's inventory counts in the reeling department, Inventory had been counted only for receiving reports 674 to e 6 Your examination showed that inventory fo al shipments made September 2 were induded Inthe counts inthe department for wich the inventory was taken. ithe yearend audit work you obtained celling prices, costs, terms, and recording data for Fecelpt and shipment. They are as shown below. PURCHASES OF INVENTORY Included in (I) or Becded fom Recevieg peso AUR FOB Ongin Report: Date ‘Date Amount of Purchases or = "Soul —__Desination , we oe 800 T Destination 660827 901 36,330 I Origin fl 820, 8k 5750 1 Orin» ¥ 682 827 901 140,220 1 Destination x 683 830 902 13,500 E Destination _ 4 830 902 31180 ©) + _Ogin | 32 902 E Origin 686 aay 402, 10,580 — Destination * oa ‘Page 1 of 14 Pages:FINAL PREBOARD EXAMINATION (CPA REVIEW SCHOOL OF THE PHILIPOUNES (CPAR)- MANILA ‘SHIPMENTS OF INVENTORY su 39,2018 / SUNDAY / 8.0084 = Shipping Document eso Amount Included in (1) or Excluded from (E) . g ‘August Sales Journal 310 T Bit 1 r 312 f 95820 | 2234 1 313 S01. 19,050, : Lar ap 9.01 5,790 y+ 315 902 48,630 E* 316 02 10,350, E 317 902 2340 Ex 318 202 108,330 E< 7. Gy i The entry to adhust the records as of August 31 for cutot errors in accounts payable Is A. Accounts payable 1823 Purchases Mote 182,340 B. Purchases 37,260 ‘Accounts payable 37,260 Accounts payable 137,040 Purchases 137,080 ©. Purchases 25,800 ‘Accounts payable 25,800 VD 2, The entry to adjust the records as of August 31 for cutoff errors in sales is: AC Recounts receivable “23,400 ‘Sales 8. Accounts receivable et oe 169,650 c Sales fs 98,940 ‘Accounts receivable cam 98,940 a 122,340 ‘Accounts receivable i 122,340 Ke For the! and that the gross profit percentage is approamately 30 percent eer ew following questions, assume thet no adjustments in questions 1 and 2 fected inver cussions 1 and fected inventory 3. As a reslt ef tepurchases cutoff test, how much should be removed from the cents AvPI49220-/ 8, Pi, s00 cc P183,720 D.PMEo0 Ph Pe ares tthe Gales ast test, how much should be added to the client's physical Ci eee to. A'pLIB 755 P8004 . psi,s0s b. P1028 x ; Wee 6.800 4 Maro Sp. & Tenet tothe cient’ inventory is i = nea WS10- 9,68 = 72, 15° C. P64 425 decrease Pra38 decease y fe ast of EVERLASTING COMPANY’ Financial statements for fre nom concentrating onthe evew ofthe working papers fsjusting joural ties may be crafted to arrive atthe Your firm is currently conducting the year ended May 31, 2015: You ‘soared by your staf where posse " “hated balances of the accounts that may be affected page Zot 14 Pages‘CPA REVIEW SCHOOL OF THE PHILIPPINES (CPAR) - MANILA FINAL PREBOARD EXAMINATION ‘Working Paper No. 1 8 o> cant Rarelon ene aire Mey 31/2015 beak waaay Der that He 7,623,170 O° (45471) ‘Add (deduct) reconciing items: ot Tae Deposit in transit (Note 1) 8510, — Outstanding checks (Note 2) Hy > Pas} — (108,832) eae te (ete 3) font gist 41,850 (2,500) i 197. showed the following accounts with their unadjusted balances: (480 7,837,500 eee 112,500 187,500 ial PEBZOO 75,400 aie ck in the amount of P19,750 dated Apri 25/2014) which up to thas been mi et were among the tems courted during the cash 2015. ote maturing on May_32, 2015. The note bears eye ended Hay 31,2034 mas rope pcr. the working paper showing the bank reconciliation with PN, ‘was reconcled withthe general ledger balance, you verified that 's an adition to the bank balance. ACCOUNTS RECEIVABLE ‘Subsidiary Ledger and General Ledger Balances May 31, 2015. 4,023,527 (187,608) a, 12D. P8344 39.0324 Ba. 2015, ems FOB shipping pait. The company pany's branch on May 31, 2015 on sales made June 15, 2015. Collections fromFINAL PREBOARD EXAMINATION guapamiang nenaer om Mt Working Paper No. 3 ALLOWANCE FOR BAD DEBTS a May 31, 2015 Bees, ure 1, 2038 407,500 (deduct transactions during the year: ‘ of accounts aged 5 years | __Bad debt provision forthe year May 31, 2015 Poss 41.20 5 903,670 5 fos 718,853 ts 737225 15° 11038! BO 994 + (NAD -1RGOP 20. Wg, Pa023527 Se, wo gaan Pasa! D. Patgos99 Fest c P3,879,074 D. 73,878,419 D. 328,822 12% two-year note payable HR 1.24 1,850 D. P1850 en anuary 2, 2007. Shown below i the company's for December 31, 2015. we omshares (P100 par value) shares (P25 par value) on share capital ings (8s of January 1) ‘Your investigation reveals the following ans-a Sr any 2008, are being amertized over an expected usefl Me of 14 © equipment covered by the patents costing P225,000 were debited M12, Amortization in 2012-2014 included amortization on the of the relevent patent. It is determined that the P225,000 should Its futher determined on December 31, 2014, that one of the ‘only 2 years. This patent was onginaly assigned a, cost of ie 60 | Barer ts, Au Bae as ania 55 company the y paying P150,000. A of December 31, 2015. The agreement cals for an ‘etry debiting the account for P35,000 was made at the “unamortized portion of amounts paid to promote for services corporation. ‘These fees have been amortized, since inception, “The decision is made, as of December 31, 2015, to reduce the ° ‘costs to 12 years. following: assigned net asset values of an acquired in early be of valve for an irdefnte period. consulting frm in early 2014 for a major advertising effort foran indefinite period. ‘amount in the Goodwill account. ats eg. Se Patents on December 31, 2015? ; a meting 9,285 EC PLIGG7IS - D, PLAS6.786 (30 abe ‘Agreement on December 31, 20157 ~— re cic aaa oe adr ‘Costs on December 31, 20157 oS © P417,375 ‘D. P1M4,625 bss ber 31, 20157 af . 600,000 parclehe + WR 2H 00 D. P325,714[CPA REVIEW SCHOOL OF THE PHILIPPINES (CPAR) - MANILA FINAL PREBOARD EXAMINATION ‘AUDITINGEROREMS APRIL 39,2015 / SUNDAY / 8-004 —12:0080 PROBLEM NO. 4 1McD000, INC. incurred the following costs during the year ended December 31, 2015, in relation HB prepany, plant and eauiomerts amy ‘Land and old building (Note 1) = 3 ‘commission = 200,000 [. 8 L B 10,000,000 we pm ng a 1,000 cash and issued 10,000 the Cie, fe share a closing market pce ment appraised values for the land and the usable bullding to tear down the od building to make room tractor retains all sa a tre laced into service to cover the contract 00 at the effective 10% interest rate for 1 B. 6,000,000 D. 11,300,000 At les whan, dereiohed{CPA REVIEW SCHOOL OF THE PHILIPPINES (CPAR) - MANILA FINAL PREBOARD EXAMINATION ‘AUDITING PROBLEMS. pom 19.2085 SUNDAY 008 = 10088 18, What isthe cost of land improvement? 7 A. 200,000 B. 190,000 cc. 430,000 , 420,000 J 963.) what's tne cos of machine? ‘A. 4,660,000 8. P5,310,000 © —C. P5,400,000 ©. 5,460,000 ¥ 2 ‘5, 20.) How much ofthe above expenditures should be charge to expenses forthe year ended €3 December 31, 20157 AL 433,333 c P303,333 p, P313,333 © PROBLEM NO. 5 Presented below are two independent stuations. Answer the questions at the end of each situation SYOU Have been essigned to audit the financial staterients of SENDONG COMPANY for the Year fended December 31, 2015. You ciscaver the folowing situations Ber Se ardereec rca of 946,500 was not accrued at the end of 2014, It was recorded when s (4) received in February 2015. , oa ME) a espe costing P5000 was expensed when purchased [email protected] 2, 2014) Is expected eee peeatarn.s yen" We vith 00 ‘eaidual value. The company typically Uses straight-line ce Gapresition forall proerty, pert, and equpment. 1% aces xrcn co ve rr e014, aya cot oon f Shiro teyen period. Wortzaton of P30,000 wes recorded In 2014 and ae " Ih) 2014, Serdong Company leased a building for years at 2 monthly rental of IPaaDD. On that date, the company pad te olowing amour which were expensed when a pad. ug) 4 Seat depot 60,000 * f° Fst months rent 24,000 Last month’ rent 2a.o00 * eine.oo0 I peleempeny revere P108,000 from a customer atthe begining of 2014 for services that IP tapirtom every ove 9 3-ye2" period besinning in 2014, None ofthe amount receved Ivins reported 2s uneamed revenue tthe end of 2019. 245 | ~ Ie leieiereias ventory costing 714,600 was inthe warehouse at December 31, 2014, but MMecincarecty emitted fom the privscl court at that date, The company uses the perodic Themen meas etal Blow [assume all amounts are material and ignore income tax effects. A xe. Cees co is understated by ® B, Pa8,100 . P35;100 v . 71,600 J 0. 2 Seta ont pan 8 ey 8, 30,100 € PBA00 v . 27,600 on The 'on Sendong Company's statement of financial postion at 6! is understated by unteattlarng x A B, P23,500 . P19.000 D. 8,100 LOTLOT, INC. Boal basis of accounting for several years. Areview ofthe records, however, indicates feipenses and revenues have been handled on a cash basis because Crevrors made by en inexperienced bookkeeper, Income statements prepared bythe bookkeeper or a i emea le 2o\4 pd P2,0 net rcs for 2018. Further eomnaten of the records reveals $ following items were handled mproperty age TF 14 Pages(CPA REVIEW SOH00 OF THe PHILIPPINES (CPAR) - MANILA FINAL PREBOARD EXAMINATION ‘AUDITING PROBLEMS : APRIL 19,2015 / SUNDAY /B:008E = 1:008H 1. Rent was received from a tenant in December 2014. The amount, P120,000, was recorded 2s income at that time even though the rental pertained to 2015. 2. ‘Wages payable on December 31 have been consistently omitted from the records ofthat date and have been entered as expenses when paid in the following year. The amounts of accruals recorded in this manner were: December 31, 2013 33,000 December 31, 2014 36,000 December 31, 2015, 28,200 3. Invoiees for office supplies purchased have been charged to expense accounts when received. Tnventories of supplies on hand atthe end of each year have been ignored, and no entry has been made ft Me ae Devember 31, 2013, 39,000 (we December 31,2018 "26,200 a cha December 3, 2015 #27900 See 0 2, Watts the corrected net income for the year 20147 nPpe36 200 8. 02,200 CP 396,200 , pa17,800 7B 25, vinatisthe comectes net core for 20157 ‘A. P901,200 D. P1,125,600 PROBLEM NO. 6 ‘One of the cash generating units of PIPIT COMPANY is that associated with the manufacture of wine barrels. At December 31, 2015, Pipt Company believed, based on an analysis of economic indicators, that the assets of the unit were impaired. The carrying amounts of the assets and yp ‘abies ofthe unt at December 31,2035 were: 2 peer : 4,200,000), it 28% —» spt enty WSepreiation—buldings * (oj (100,000) pistons a 2200/0007) tgmtg shay -an depreciation ~ machinery ** cfr Goo.oan) } "445 “tees <50,000, _ me 00,000 400,000 Tor doubt scouts (30,000) |v 0 200,000 ? 77 «003000 2 5 200,000 _ : 600,000 per annum Uy = a 50,000 per annum a e sent ode Pest Company detained the vale i se of re unt to 550,000 he seceabies were considered tbe colette, excep those consiered coubtfl. The tventor/s reece see 1s equal tothe eamying amount. The foi oiue less cost of dsposal ofthe comparys baldmog 1s 2,350,000. During the yes 2016, Pp Company increased the ceprecation charge on buldngs to P650,0 per annum, and to perannum for factory machinery. The inventory on hand at Janvary 4, 2016 was sold by the end ofthe year. At December 31, 2016, ipt Compony, due to 2 retary in the market to the use ofthe traditional barrels for wines and an increase n wine production, assessed the recoverable amount ofthe cash generating unit to be P3S0,000 greater than tng Carrying amount ef te nit. As.@ result, Pipit Company recognized 2 reversal of the impairment loss v 26. What amount of impairment los on December 31, 2015 should be allocated to Machinery? bo ene 'B, P150,000 © P50,000 D. PO Page 8 of 14 Paces | ki, Se(CPA REVIEW SCHOOL OF THE PHILIPPOIES (CPAR)- MANILA FINAL PREBOARD EXAMINATION ‘AUDITING PROBLEMS : non. 39,2015 SUNDAY /8:008H = 11.0088 iii Sarena ¢ 2015? 72,350,000, 2,285,714 P2,250,000 ©. P,800,000 C «P28 whse amount of reversal of mperment loss shouldbe recoanized on December 31, 20367 CA Fe “—B, P200,000 °C. 300,000 D. 356,000 D xB @ ‘Assume that the recoverable amount at December 31, 2016 was 200,000 greater than the (pitin aterrcoomion fhe paar eee 000 B. 71,819,298 © Pt,150,000 D. P1,230,702 7% 30. Assume that the recoverable amount at December 31, 2016 was P200,000 greater than the ‘arrying amount of the cash generating unit and that the recoverable amount of the Buildings was Pi 800,000. What isthe net carrying amount ofthe Factory Machinery after the recognition paiment recovery? ssege —® F,00,000 8. 1,250,000 D. P2,200,000 audit of the company’s cash & Bp Pe 1% \9P318,930 a Ea, 453,110 (ay 0 Tye ae P342,590 oe oe ane os ie SP ‘ican 32,070 SFoomas, “e) _® 48,040 38a Taam) Rw se 780 "8,070 os v0 = Sea cme a Beet iets ean lee = % Brati ita (9+ mot ‘anrying amount of the cash generating unit. What is the net canying amount of the mp 20k(PA REVIEW HOO OF THE PILIPINES(CPAR)- MAMILA FINAL PREBOARD EXAMINATION ‘AUDITING PROBLEMS eau 19.2018 /SOMDAY [BOON = 0088 v/ ( 32. What s the adjusted bank balance on November 30? A. 318,150 8, 342,590 C. P318,900 . 317,400 A 33. What isthe adjusted book recelpts in December? A. P1S3,750, B, P153,110, c P151,690 D. 152,720 B34. What is the adjusted bank disbursements in December? A. PI7690 8. P182,920 . Pi72,980 D. P183,010 Dp 35. What isthe adjusted book balance on December 317 - A P288,750 B. P288,700 C. P288,210 89,730 900000000 - PROBLEM NO. 8 ‘The HVR Company induded the following Ins notes receivable a of December 31, 20 Note receivable from sae of land 2,640,000 Note recesvable from consuitation 3,600,000 Note receivable from sale of equipment +}800,000 The following trensactons during 2015 and other information relate to the company’s nctes receivable em arte aA B52) Ge dermry ,2015, um company std 2 wos oo de x Company. Te ae @A® Purchased 10’ years ago, was carried on HVR'S books at P1,500,000. HVR received & Fenmarebearing rts fr P2£10,000 rom Tle Tere de on Gacennee ok 2016 There waste esabishd excargs pce te nd The rein vee ate this note on January 1, 2015 wes 1096. Booher ava sh pet ENS 2 ut BY Ga danny 2, 2015, ve company received & 536) 3,600,000 promissory noted exchange, i Hor Whe consultation services rendered. The note will mature on December 31, 2017, with V" s2 IMtstest ecb every December 31. The for value ofthe sersces rendered i not eau" 22hT. eee rection ate of interest for: oo Of this type was(10%).an January 1, ij. 48484 RGIS) On ariary 4 2015, te company sotd an ld equipment wth 2 canying amount of Gp ee 50000, receting P7 200,000 rote. The note bears an interest rate of Jihad fo be $7) repeehing rua instalments of 72,200,000 (pis terest on te oustanding bance), Hesved the fist payment on Decenber 3, 2015 Tere & ro eaablahal hart save Peeapment. The mort irteres rate fo smiorrotes was {ath on Denuaty 1201s Mets Findon oe 0 fr dna ae nr aoe tm ei “fi De 36. What amount of consuitaton fee revere shouldbe recognized in 20157 $ ‘A. P3,600,000 P2705 000 -C. 087,500. P3,152,500 PD 7 Wht tl be ete os canon slo equpnert? Ree orn Miao 137,300 B. P6037,300 —C P5,477,500 7.a77,so0 * wf © GB) Thesmount to be reported 2: noncurent notes recelvabie on December 31, 2015 i, a 97,482,200 4e Yamountto be reported as current notes receivable on December 31, 201515“ OSes roeaz00 c raa0yg00 b. propo0 “i © © $0, Hommuchinerestiname shuld ve ecoonzes 020157 A. P974,200 Ca D. P1,160,500 ee ‘a 000000000--- ie Page 100f 4 Pages ¢ t45.101(28)PROBLEM NO. 9 EZE COMPANY underwent a restructuring in 2015. The company conducted a thorough internal ‘ud, during wich the fllowing facts were discovered. The auc occured during 2015 before any adjusting entries or closing entries ae prepored. _A® Additional printers were acquired atthe beginning of 2013 and added tothe company's office network. ‘The P45,000 cost of the printers was inadvertently recorded as maintenance ‘expense. The printers have five-year useful lives and ng material salvage value. This ca eee renee ebatasemnesty hermes 9Te Per &-10 ho)? «ff Tree weeks per the aut, the company pad 51,000 for storage boxes and eeoerdie as cess Torr var acre weds a ET On December 31,2014, ventory was understated by P112}000 de to @ mistake In the 2 Bsa iveror eure, The company ues the prod very sata TIE T jy BC Thwee years eater, the company recorded "ise a (22,000 ory shares, P at) as flows: (ae 500. Retained earrings eam 01? ay (Ordinary share capital NE pg 12000 2 es fad 2 market rice at the time of P10 pershare. sp] 014, the company failed to accrue interest expense that accrued during the of 2014 on bonds payable. The bonds which were issued at face value “The following entry was recorded on March 1, 2015, when the semiannual AE nes 0% eam Og ie ey was pcos he bee 203802. ae ed to insurance expense af te time Mee on “Hes Pie Toy he Be Untormetion,detenine te folowing: (anore tax effects) 1m ms | rect the desert ‘tem A shoud ir a ry ener ae 180,000 yerror described if item D:should include a Seog oth account balance ot December 3, 2015 should be 2,0 P1200". Pe0,000 olonce at Deerber 31, 2018s be 72 > 26-(r2«2) % P72,000 BPO fCPA REVIEW SCHOOL OF THE PHILIPPINES (CPAR) - MANILA FINAL PREBOARD EXAMINATION PROBLEM NO. 10 ARAN CO. started operations on September 1, 2010. Jaran's accounts at December 34, 2013 / included the following balances: oy, Machinery (at cost) P 910,000 r Accumulated depreciation - machinery 482,000 s ‘Vehides (at cost; purchased November 21, 2012) 238 468,000")! ry ‘Accumulated deprecation = vehicles 196,560 | 27) sy Land (at eost; purchased October 25, 2010) 810,000. st Nos Building (at cost; purchased October 25, 2010) 1,857,200 alt et 286,140 pe ‘Accumulated deprecation — building Details of machines owned at December 31 2013 are as follows: Cost Useful Life Residual Value Machine Purchase Date 1 October 7, 2010 430,000 5 years 725,000 SY a February 4, 2011 480,000 years 72 30,000 °° ee sums eer tet “Addition! piney 2 PY 115 3 wo 4a snd balances the records at month-end, ‘= Jaran calculates depreciation to the nearest month ar Recorded amounts are rounded to the nearest peso, ar © Geran Uses straightine depreciation for ail depreciable assets except vehicles) which are ‘epreciated on the diminishing balance at 40% per annum. . “The vehicies account balance reflects the total paid for two identical delivery vehicles, each ‘of which cost P234,000, one the land and nd the reporting date is December 31, ‘building, Jaran estimated the bulding's useful tfe and residual 0, respectively. rom January 1, 2014: {machine 3) for 2 cash price of P570,000. Freight charges of on costs of P17,/580 were paid in cash. The useful life and residual '3¢ five years and P40,000, respectively 152,000 cash. Repairting costs of P6,S50 and four tak that ha a fi valve of P125,000 atthe date value of mache 1a the dete of exchange Was P435,000, The “ost 7360}000 tnd, tO the date of exchange, had been 00 in te previous overs books. ran estimated the offce Gnd resdualvlue at et yers and P5400, respectively. snce on the machinery at a cash cost of P8,280, bought on November 21, 2012 for P66,000 cash. the property ata cash cost of PS5,000. The fence has an Mears 9 zero resdal value, (Debt the cost to land 0 aN ay. pus — 1H v4 — Rim - cas — Le) 824 gL Gore ee SK Votiete ade wiry Aye‘oa ee SCHOOL OF THE PHILIPPINES (CPAR)-MARULA FINAL PREBOARD EXAMINATION 2036 os Jan. 05 Overhauled machine 2 at 2 cash cost of P120,000, after which Jaran estimated its reffairing useful if at one additional year and revised its residual valve to P5O,000, June 20 ‘Traded in the remaining vehide bought on November 21, 2012 for @ new vehicle, A trade-in allowance of P37,000 was received and P233,000 was paid in cash. gj ‘Oct. 04 Scrapped the vehicle bought on June 22, 2024, as it hed been so badly damaged in 2 traffic accident that it was not worthwhile repairing it Dec. 31 Recorded depreciation. 1% ope ‘ soon ih ANY. What stats ete ceprenaton pert for eee 12057 eases es PLaR Se Co P139,666-— =D. PL40,206 Sb tgit, ecatin-expense forthe machinery fr 2014? 3. P735,000 235,400 . 266,400 B, 18,267 cc P1983, D. P58,083 be the depreciation expense forthe machinery for 201675 B PI97,400- c F221,400 ~~ D. P205,400 expense trig ty ty em rl FET en “(a easel, \ tino ee ko lees Bien aol Hae +2 hah), FE tuys and sais secuntes expecting to ear profs on shottem Sunny 2015, Haringtan Company purchased the folowing ing Fair Value Gost 2 585,000, Pes 000 900,000 496,000 3 (4) 1,980,000 2,034,000 elated to these trading securities, Harlington Company had net fin - ty after making any necessary trading security adjustments? p7286000 c. 2934000 D. P2,700,000 " cf sxcary 8 were PBS? netincome be ifthe fir value of security B were PASS, 72,799,000 P2,700,000 . F2,855/000 secures indies the flowing on December 31, 2015: ost FaYalue /%/2013 131900 PL 251,000 /1.838,000 1,210,000 /Pa.069.000 2.961.000 purchased in 2015. In 2016, Labada Co, completed the“CPA REVIEW SCHOOL OF THE PLIFPINES (PAR) - MANTUA FINAL PREDOARD EXAMINATION SUNDRY 04M = 41,0084 —ta Wns Mar1 $0 1000 shares of Camis Co, ordinary shares at PS, les brokerage commis86o yy ‘of P3500. Sah Bie ‘orl Bought 1,800 ordinary shres of Waston, Inc. a P135 plis commission, taxes, aid cia traeacion cos of 74,950, The Labada co, proto of tracing secuties appeared s flows on Oesember 31,2016 cot raievatue 30,00 oninary shares of Ganda Co. P1606 000 0 PL,740,000' extn > IT9.0) 800 ordinary shares of Waston, Inc. Ba7s850 “Ts 225.000" + sre = 204.0 aigssss0 — eL.ass000 + Neto 7950 errata cons at wos ers on the ef he sees + Naf M00 cms vaso ne tr wate aural on ee cbs oe ra Page rcs A+ (23 208,271) D. 53. What amount of unresized gain on these secures shoud be fepored inthe O16 come satener? 7a Arm rcs ram gam” © @ rms tncancn ese of camas co. cay stares on Mac 20167 ET gaa ae OT Anse BPs 500 ag oe 7 BS et omoure spo ve repated os tang secur in Labed's statement of Mencia Poston on Deceber 3, 216" Rnvsestco PROBLEM NO. 12 January 3, 2014, DIAS COMPANY issued 3-year, 3,000 convertible bonds at face value of bper bond. Interest isto be pad ancualy inarvears atthe seated coupon rate of, Each halders option, into 200 P2 par value ordinary shares at any time up Issuance the prevaling market interest rate for sialar debt witout gS) te sae dk the Mat prce ef one ednny sare was econ on Cecanbe 3, 2018, ._P1,905,950 of the convertible debt is B PLg73621 ‘c. P1,600,000 . 2,490,000 separa on Dias Company's income statement for the year 3786.40 so,07 ©. 230,000 ©. P34t,000 7 a} conversion on Deceber 31,2015, shou incase a cred to, Sein, 308 C P2;s53,661- ov. po OF Sante + Sw feo hem ia Se Zara ined @ pieCe of equipment trom Seller Company se! December, 018, Soho were eae, lines of cet ot 10%. The equipment execed noe 3 Be te, MO ees g Mts book value on December 31, 20167 Bi P630,000 C Psa1,767 D. P341,267 ote at December 31, 2016? md C. Pt,200,000 D. 819,612 EXAMINATION — awe aise 14 0 16 Pages pine